Invest in Russia — invest in Russian regions!
All analytics

A Crisis Like No Other, An Uncertain Recovery

Research
26 June 2020
МВФ ухудшил экономический прогноз по России
Source
Release date
06/24/2020
Open PDF

Global growth is projected at — 4.9 percent in 2020, 1.9 percentage points below the April 2020 World Economic Outlook (WEO) forecast. The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast. In 2021 global growth is projected at 5.4 percent. Overall, this would leave 2021 GDP some 6½ percentage points lower than in the pre-COVID-19 projections of January 2020. The adverse impact on low-income households is particularly acute, imperiling the significant progress made in reducing extreme poverty in the world since the 1990s.

As with the April 2020 WEO projections, there is a higher-than-usual degree of uncertainty around this forecast. The baseline projection rests on key assumptions about the fallout from the pandemic. In economies with declining infection rates, the slower recovery path in the updated forecast reflects persistent social distancing into the second half of 2020; greater scarring (damage to supply potential) from the larger-than-anticipated hit to activity during the lockdown in the first and second quarters of 2020; and a hit to productivity as surviving businesses ramp up necessary workplace safety and hygiene practices. For economies struggling to control infection rates, a lengthier lockdown will inflict an additional toll on activity. Moreover, the forecast assumes that financial conditions—which have eased following the release of theApril 2020 WEO—will remain broadly at current levels. Alternative outcomes to those in the baseline are clearly possible, and not just because of how the pandemic is evolving. The extent of the recent rebound in financial market sentiment appears disconnected from shifts in underlying economic prospects—as the June 2020 Global Financial Stability Report (GFSR) Update discusses—raising the possibility that financial conditions may tighten more than assumed in the baseline.

All countries—including those that have seemingly passed peaks in infections—should ensure that their health care systems are adequately resourced. The international community must vastly step up its support of national initiatives, including through financial assistance to countries with limited health care capacity and channeling of funding for vaccine production as trials advance, so that adequate, affordable doses are quickly available to all countries. Where lockdowns are required, economic policy should continue to cushion household income losses with sizable, well-targeted measures as well as provide support to firms suffering the consequences of mandated restrictions on activity. Where economies are reopening, targeted support should be gradually unwound as the recovery gets underway, and policies should provide stimulus to lift demand and ease and incentivize the reallocation of resources away from sectors likely to emerge persistently smaller after the pandemic.

Strong multilateral cooperation remains essential on multiple fronts. Liquidity assistance is urgently needed for countries confronting health crises and external funding shortfalls, including through debt relief and financing through the global financial safety net. Beyond the pandemic, policymakers must cooperate to resolve trade and technology tensions that endanger an eventual recovery from the COVID-19 crisis. Furthermore, building on the record drop in greenhouse gas emissions during the pandemic, policymakers should both implement their climate change mitigation commitments and work together to scale up equitably designed carbon taxation or equivalent schemes. The global community must act now to avoid a repeat of this catastrophe by building global stockpiles of essential supplies and protective equipment, funding research and supporting public health systems, and putting in place effective modalities for delivering relief to the neediest.

Anlytics on the topic

All analytics
Articles
25 September 2020
Reshaping the Insurance Industry Post-COVID-19

Citi presents an article concerning the COVID-19 pandemic impact on the insurance industry. The authors note that experts in the global insurance market are still discussing quarantine implications, and next to that, are also seeking ways to strengthen the industry in case of future perturbations.

Research
9 October 2020
TREND VISION 2020. How To Make The Future Manageable

The world is trying to understand the impact caused by the global COVID-19 pandemic and uncertainty still remains, in this issue of the annual «Trend Vision 2020. Russia» report experts talk about trends, signals of change and how to analyze them, in order to make the future, in which this world crisis is not the last one, to be not a frightening «black box», but a platform for exciting experiments for successful brands and companies focused on long-term sustainability.

Articles
28 April 2020
How to Remain Remotely Agile Through COVID-19

One of the pillars of agile ways of working is team collocation. Study after study shows that teams that work together in the same place report higher productivity and effectiveness and better decision making. So, what happens when a disruption such as coronavirus renders collocation inadvisable if not impossible? Can team members working in remote locations still be agile?


Research
29 July 2020
Fueling the energy future. Reinventing oil and gas for a new purpose

In this publication, Accenture studies how the oil and gas industry fundamentals are changing as energy systems are rapidly becoming decarbonized.